There has been a controversial debate about the roles of diapiric folding versus fault‐related folding in mud‐cored anticlines. This study tackles this debate by looking into the structural developments in southwestern Taiwan. Among all the structures, the Liuchiu anticline is the only active structure exposed above sea level and therefore offers a unique opportunity to integrate land and marine data sets. On Liuchiu Island, we obtained the fold core geometry at the surface and identified three terrace groups with age constraints. In the offshore area, we obtained the fold limb geometry from seismic profiles. Given the tight fold shape and the asymmetric terrace tilting, we found that a hybrid fault tip fold‐fault propagation fold model can best explain the geologic and geomorphic features. In this regard, mud diapirism should be a secondary process, possibly along discrete patches of mobile shales to enhance fold amplification. Our model yields decreasing shortening rates from 0.7 mm/yr during the Plio‐Pleistocene to 0.375 mm/yr since 120 ka. The uplift rate however increases since the mid‐Holocene, which we tentatively attribute to larger mobile shale deformation triggered by earthquakes along the fault after the near‐fault fluids are drained. At the regional scale, we further suggest that the remaining plate convergence is absorbed by a few major structures west of Liuchiu Island.